- Protect consumers by defining and outlining rights and duties of insurer / insured.
- Approved by the Superintendent of Insurance (Insurance Act).
- Included in all fire insurance contracts.
1) Misrepresentation At the time of application: a) False description of property.
b) Non-disclosure.
c) Fraudulent omission.
Insurer must prove: 1) Material fact. 2) Insured’s intent.
2) Property of Others Not included unless stated in the contract (Bailee).
3) Change of Interest Insurer covers new interest replacing insured’s automatically if:
a) assignment under the Bankruptcy Act.
b) change of title through succession, operation of law, death of the named insured.
4) Material Change After policy takes effect: Insured Notify insurer promptly. Insurer May re-rate or cancel policy.
5) Termination Insurer a) 15 days reg. mail / 5 days personal.
b) Pro rata refund.
Insured a) Any time, preferably written.
b) Short rate refund.
6) Requirements After Loss Insured must provide insurer with:
a) Written notice of loss to insurer.
b) Completed Proof of Loss (Statutory Declaration) stating:
i) Inventory > damaged/lost property. v) Insurable interest(s) - Mortgagee.
ii) How loss occurred. vi) Changes since issue - Address.
iii) Insured did not cause the loss. vii) Location of property at time of loss.
iv) Other insurance/insurers.
c) Details of undamaged property - Inventory/Values.
d) Accounting or inventory records - Invoices/Receipts (Waiver - Commercial).
7) Fraud a) False statement by insured in claim. c) Insurer must prove insured’s intent.
b) Right to recovery is forfeited.
8) Who May Give Notice and Proof Agent or mortgagee (Bank) if insured incapacitated.
9) Salvage Insurer owns damaged property after settling with insured.
Insured Must take reasonable steps (Removal) to prevent further loss/damage.
Insurer Contributes pro-rata to the cost of doing so.
10) Entry, Control, Abandonment Insurer Can enter premises to appraise/investigate.
Insured Cannot abandon property to insurer.
11) Appraisal Disagreements over values (X Coverage) arbitrated under Insurance Act.
12) When Loss Payable 60 days after Proof of Loss completed unless written agreement.
13) Replacement Insurer can repair, rebuild or replace property instead of paying cash:
1) Written notification < 30 days of Proof of Loss. 3) Restoration to original specs.
2) Work must start < 45 days of Proof of Loss.
14) Action Against insurer must be taken within 1 year (2 Years – MAN/YT) after the date loss or damage occurs.
15) Notice Insurer Chief agency or head office. Insured Last address on file.
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